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ZERO COUPON ZERO PRINCIPAL INSTRUMENT
Articles Corporate Laws / IBC / SEBI
By: - DR.MARIAPPAN GOVINDARAJAN
Rule 4A permits companies to carry out corporate social responsibility activities through subscription to Zero Coupon Zero Principal Instruments issued by eligible Not-for-Profit Organisations registered on the Social Stock Exchange. These instruments carry neither interest payments nor repayment of principal. The issuing organisation must use funds solely for disclosed social projects, maintain supporting records, and comply with disclosure, utilisation, impact-reporting, and material-event requirements after listing.

By: - Raj Jaggi
Departmental appeals under Section 107(2) must be filed within six months from legally effective communication of the challenged order. Later audit findings, delayed internal review, authorisation by the Commissioner, or movement of files between departmental branches cannot restart or extend limitation. Section 107(4) permits condonation only within one further month upon sufficient cause and does not authorise admission beyond that outer limit. Recovery proceedings for an erroneous refund are separate and cannot be used to extend the appellate deadline.

2026 (10) TMI 706
Case Laws Indian Laws
Third-party possession objections require adjudication before coercive recovery can displace a claimant from auctioned property.
Rule 43 of the Income-tax (Certificate Proceedings) Rules, 1962 requires adjudication of a good-faith possession objection by a person other than the defaulter before coercive execution. Discrepancies in the sale certificate's door number, measurements and boundaries, coupled with the claimant's assertion of independent ownership and exclusion from the secured assets, required determination of the objection on its merits. Treating the objection as not maintainable without adjudication could not support physical possession through an Advocate Commissioner. The Recovery Officer must decide the objection according to law before physical possession is taken.

2026 (10) TMI 707
Case Laws VAT / Sales Tax
Prior sanction for specified fiscal offences does not shield independent forgery charges involving disputed tax-evasion transactions.
Section 80 of the Karnataka Value Added Tax Act restricts cognizance to offences under its specified fiscal provisions and does not require prior sanction for independent IPC charges of forgery or use of forged documents. Quashing a charge-sheet under inherent criminal jurisdiction is unavailable where allegations concerning creation and use of e-sugam documents, tax evasion, and the accused's role require resolution of disputed facts at trial. Absence from the FIR does not prevent arraignment following investigation, and no thirty-day charge-sheet limit applies to the IPC offences.

2026 (10) TMI 708
Case Laws Central Excise
CENVAT credit remains available for excise duty paid during default periods despite the Rule 8(3A) restriction.
Rule 8(3A) of the Central Excise Rules, 2002 required duty during a payment default period to be discharged without using CENVAT credit. Judicial precedents had declared that restriction ultra vires, so CENVAT credit could not be denied merely because it was used to pay excise duty during the default period. Where outstanding duty and applicable interest were subsequently paid, the settled legal position applied and the credit restriction had no operative effect.

2026 (10) TMI 709
Case Laws Central Excise
Retrospective exemption scope covers site-manufactured Ready Mix Concrete, defeating duty demand and extended limitation period.
Substitution of an exemption entry to expressly include site-manufactured Ready Mix Concrete operates from the original entry's inception where it merely clarifies scope and neither removes substantive rights nor imposes penal consequences. Entry 144 therefore exempts site-manufactured Ready Mix Concrete for October 2014 to February 2016. Extended limitation under the Central Excise Act is unavailable where prevailing circulars and judicial views created genuine interpretative doubt; the resulting duty demand, interest, and penalty cannot be sustained.

2026 (10) TMI 710
Case Laws Central Excise
Capital-goods CENVAT credit survives works-contract installation when duty-paid components are received and used in the manufacturer's factory.
CENVAT credit for duty-paid capital goods received and used in a manufacturing factory remains available where components are incorporated into a turnkey system under a composite works contract. Separate supply and erection orders may form a single works-contract arrangement, with property passing no later than incorporation, but this does not impose an ownership-at-receipt condition for capital-goods credit. Exclusion of the goods element when valuing works-contract services is a valuation mechanism, not a conditional exemption that blocks recipient credit. Extended limitation requires deliberate suppression or another specified culpable element; invoices, statutory records and returns without concealment do not establish it. Without wrongful credit availment or culpable conduct, interest and penalties do not arise.

2026 (10) TMI 711
Case Laws Central Excise
Commission-agent services for depot sales qualify for CENVAT credit when distributed through an Input Service Distributor.
Commission-agent services used to procure orders, dispatch manufactured goods from depots and collect sale proceeds are input services where the depot is the place of removal. Because depot sales remain connected with clearance of final products up to that place, the related service-tax credit qualifies under the CENVAT Credit Rules. Credit distributed by the head office through an Input Service Distributor is therefore admissible, making related credit disallowance, interest and penalty unsustainable.

2026 (10) TMI 712
Case Laws Central Excise
CENVAT credit on moulds sent for job work remains available where the revenue-neutral arrangement creates no double credit.
CENVAT credit on moulds sent to job-workers under job-work challans remains admissible where the moulds, as capital goods, are returned after use and the procedure does not breach the CENVAT Credit Rules. Separate reversal of credit on PP granules for accounting purposes does not require reversal on moulds. Where reversal and re-availment would be revenue-neutral and create no double credit, denial of credit is unwarranted. Extended-period recovery is unsustainable where departmental knowledge of the transactions exists and suppression with intent to evade excise duty is not established.

2026 (10) TMI 713
Case Laws Central Excise
Captive consumption exemption for inputs turned on whether by-products, waste or residue were marketable and excisable; appeals were dismissed.
Exemption for captively consumed inputs under Notification No. 52/2002 was considered in relation to whether waste, residue or refuse arising as a by-product was marketable and excisable. The Supreme Court dismissed the appeals challenging the Tribunal order, finding no good ground to interfere. The Tribunal's treatment of the exemption and excisability issue therefore remained undisturbed.

2026 (10) TMI 714
Case Laws Service Tax
Insurance policy reinstatement charges constitute taxable service consideration, while surrender and foreclosure charges fall outside the service-tax levy.
Surrender, policy discontinuation and foreclosure charges in life-insurance policies do not constitute consideration for the relevant taxable service and therefore fall outside service tax. Reinstatement charges, paid to restore and continue the insurer-policyholder relationship, constitute consideration for continuation of taxable service and remain chargeable to service tax. A claimed bona fide belief does not preclude the applicable penalty where a specialised insurer is aware of its tax obligations.

2026 (10) TMI 715
Case Laws Service Tax
Road transportation without consignment notes remains outside service tax where no goods transport agency exists.
Road transportation performed without issuing consignment notes does not meet the statutory definition of a goods transport agency under the Finance Act, 1994. Transportation of goods by road is included in the negative list, except where the service is provided by a goods transport agency or courier agency. As no consignment notes were issued, the transport activity remained within the negative-list exclusion and was not liable to service tax. Consequently, the related tax demand, interest and penalty did not survive.

2026 (10) TMI 716
Case Laws Service Tax
Export of services status applies when promotional work for a foreign principal delivers business benefit outside India, enabling service-tax refund.
Promotional and market-survey services performed in India for a foreign principal qualify as export of services where they are provided from India and used outside India. For Category III services, the recipient's location and the place where the commercial benefit accrues determine export status, rather than the location of the underlying activities. Promotion undertaken exclusively for the foreign entity satisfies this test when that entity receives the business benefit, even if its goods are sold to Indian buyers. The services consequently support refund of service tax.

2026 (10) TMI 717
Case Laws Service Tax
Service-Tax Refunds Require Modified Self-Assessments and Proof That Tax Incidence Was Not Passed On Before Payment
Service-tax refund claims governed by Section 11B, as applied through Section 83, cannot reopen an unchallenged self-assessment; the assessment must first be modified through the statutory process. A later Board clarification on exemption cannot itself alter completed self-assessments, and a representation cannot replace the statutory appellate remedy. Payment of a refund also requires proof that the tax incidence was not passed on to another person. Credit notes issued to educational institutions alone do not establish that the burden was not ultimately passed to catering-service recipients, and Rule 6 does not displace the unjust-enrichment requirement. Consequently, the claimed refunds were not payable.

2026 (10) TMI 718
Case Laws Service Tax
Service tax valuation excludes recipient-borne TDS, while procedural lapse does not defeat adjustment of advance GTA tax.
Advance service tax paid and adjusted against later GTA liability remained available for adjustment despite failure to give the prescribed intimation, because procedural non-compliance did not negate the excess payment; the GTA demand and related penalties were set aside. TDS borne by the service recipient under foreign technical know-how agreements was not consideration received by the foreign provider and was excluded from the taxable value of IPR services; the related demand and penalties were set aside. Liability for ineligible CENVAT credit remained because the credit and reduced penalty were paid within the stipulated period, sustaining the demand, interest, appropriation and penalty.

2026 (10) TMI 719
Case Laws Service Tax
CENVAT credit for motor vehicles remained available where wrongly paid service tax exceeded the disputed credit reversal.
CENVAT credit on motor vehicles could not be denied where the underlying activity was mining service but service tax had been incorrectly paid under Site Formation Service. Mining service entered the service-tax net only from 1 June 2007; therefore, the activity was not taxable during the disputed period under the stated classification. Service tax paid on that non-taxable activity was to be treated as reversal of CENVAT credit. As the tax paid exceeded the disputed credit, denial of credit was unsustainable and the cash amount paid under protest was refundable with applicable interest.

2026 (10) TMI 720
Case Laws Service Tax
Works contract valuation and verified taxable receipts restrict differential service-tax demands involving ready-mix concrete production activities.
Ready-mix concrete produced through an automated batching process is treated as an excisable manufactured product, making a differential service-tax levy on its production unsustainable where service tax paid exceeds potential excise liability. For works contracts involving material supply, including recipient-supplied cement, taxable value must exclude the material component through the prescribed abatement. Receipts reported in Form 26AS cannot alone establish a differential service-tax liability; they must be verified as consideration for taxable services. Service-tax demands therefore require verified taxable consideration and correct works-contract valuation.

2026 (10) TMI 721
Case Laws Service Tax
Railway original works exemption protects composite infrastructure contracts, while shared tax data cannot alone establish suppression.
Railway works involving installation of OHE-mast bases, infrastructure construction and structural reconstruction qualify as original works where their composite, naturally bundled scope has a dominant construction character; repair labels or isolated repair elements do not alter that classification. The contracts were therefore exempt from Service Tax as railway original works. Extended limitation cannot rest on departmental delay in processing Form 26AS data already available through inter-departmental sharing. Without suppression or wilful misstatement intended to evade tax, the demand is time-barred, and associated interest and penalties lack foundation.

2026 (10) TMI 722
Case Laws Service Tax
Service tax timing depends on when commission-agent services were performed, not later commission receipt, preserving the applicable exemption.
Service tax liability on commission-agent services depends on the date the underlying service is rendered, rather than the date commission is received. Transfer of DFRC licences completed before 09.07.2004 remained outside tax under Business Auxiliary Service and within the applicable exemption at that time. Later receipt of commission did not retrospectively alter taxability. Consequently, commission received after 09.07.2004 for services rendered before that date attracted no service tax, interest, or penalty.

2026 (10) TMI 723
Case Laws Service Tax
Service-tax clarification powers: jurisdictional authorities cannot issue binding liability clarifications outside statutory adjudication or the advance-ruling framework.
Jurisdictional service-tax authorities have no statutory power to issue clarifications on a person's service-tax liability in response to representations. Chapter VA of the Finance Act, 1994 provides an advance-ruling mechanism only for qualifying applicants and does not create a separate clarification process. Taxability and registration must be determined through quasi-judicial adjudication, with an opportunity of hearing; an unauthorised clarification would bypass those safeguards. Liability for a relevant period may require examination of agreements, contractual relationships and statutory amendments. A clarification issued without statutory authority cannot bind parties or statutory authorities.

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